China, the global leader (?) and other links

From Professor David Shambaugh in Bloomberg:

It is far from certain that the country possesses the moral leadership, based on universal values, to become a truly global leader….Its human-rights record and political system only inspire other autocrats. At its root, China’s problem is that it is sui generis — a unique country whose domestic attributes do not travel well beyond its borders. [Link]

This may be from 2015 but David Shambaugh had linked to this in his article. How the public in Asia-Pacific view other countries in Asia-Pacific. Funny that India views China far more favourably than Chinese do of India!

Malaysia, Pakistan and Indonesia have a more favourable rating of China than of India. Oh, well! Money talks and what else? India can do a better job with Indonesia and it might be worth the effort.

Elizabeth Economy on the good, bad and the ugly in China as the global leader in climate change. Important to note that coal based power plants might be shut down but coal fired chemical plants are on the rise and, second, China is building coal based power plants in other countries.

Billionaires, academics – everyone is assisting the Chinese government in its investigations:

Anbang Insurance Group Co. said Tuesday that Wu Xiaohui — its chairman, and one of China’s most aggressive overseas dealmakers — was unable to perform his duties for personal reasons. Caijing Magazine, a reputable finance and business publication, said he was taken away for questioning. [Link]

This is amusing: China allegedly has found that two more provinces are faking economic data. Who will blow the whistle at the national level?

Michael Power of Investec has an article in FT on a familiar theme of the decline of the West and more. He says that democracy played political host to capitalism in the 20th century but the financial demands placed on capitalism by democracy might be proving too much to bear. That is an interesting point but his allied conclusion that the East would therefore dominate the West is still premature for the following reasons:

He may be right about the diminishing salience of democracy for Western capitalism and of the decline of the primacy of the United States. On the latter, there is always the risk that observers give an excessive weightage to short-term as opposed to long-term trends. But, we can, for now, give the benefit of doubt to them on that aspect. But, it does not mean that the centre of gravity is shifting to the East. Almost all the problems of the West are there in the East and more – debt, demographics, climate change. On top of that, Asia faces a looming water crisis that other continents do not. Second, Asia has a big wounded (perceived or real) civilisation in its midst – China – and it is keen to recapture its ‘deserved’ position at the top of the pecking order. Conflicts are more likely than not in Asia, on account of that.

Culture of technology and innovation are yet to take roots in Asia for it still has more respect for order, hierarchy than for iconoclasts, even in science and technology. ‘Face’ is still more important than solving problems.

Asia lost its pre-eminence when labour saving technologies began to dominate the economic landscape from the eighteenth century onwards. It has not regained its mojo and it is unlikely that it would, in our life times.

Barely has the ink dried on the commentary that the People’s Bank of China is tightening liquidity and that the yield curve in China has inverted, comes the news that Beijing

is encouraging more potentially reckless borrowing. This week, the regulator put pressure on the country’s big banks to lend more to small companies and farmers, while the government announced tax breaks for financial institutions that lend to rural households. That follows recent guidance that banks should set up “inclusive finance” units. [Link]

Barry Ritholtz says here that the American President has never encountered a situation that he could not make it worse. A hard-hitting article.


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